Group Of MPs Calls For Reformed Taxation Of Contractors

by Robert Lee, Tax-News.com, London

09 March 2016

A cross-party group of UK Members of Parliament has written to Chancellor George Osborne to call for the improved tax treatment of flexible workers, or contractors.

According to trade association PRISM, there are 1.6m contractors in the UK who do not fit clearly into either of the Government's categories of worker, "employed," or "self-employed." PRISM sponsored the open letter to Osborne, signed by 55 MPs, which calls for a review of the tax system for contractors and the self-employed.

The letter explained: "We believe a well-run review will result in a more orderly market which sees the right workers get the right reliefs, greater tax compliance, and increased investment in jobs. The Office of Tax Simplification would be the natural authors of such a review."

The MPs added that Osborne should "use a strategic review to end the [current] sticking plaster approach, bring clarity to the most dynamic labor market in the world, and give all types of workers a fair deal and equal recognition."

Commenting on the letter, Crawford Temple, Chief Executive of PRISM, said: "It is only right that the tax system recognizes the way employment has evolved over the last few decades so everyone knows where they stand and can make informed decisions about where they work, how they are engaged, and how much tax they are going to have to pay. It is a win-win-win situation for the Government, employers, and workers."

Labour MP Helen Goodman, a signatory to the letter and a member of the Treasury Select Committee, remarked: "In our increasingly complex and flexible labor market, more and more people work in a way that is neither traditionally 'employed' nor 'self-employed', yet our tax system tries to shoehorn them into one or the other category. This denies them the security and advantages they may be entitled to for the convenience of the Government."

"It is in everyone's interests for the hodgepodge, ad hoc arrangements that have been built up to be reviewed, so that a productive and well-functioning system can collect the right amount of tax, as well as protecting workers' rights and privileges."

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